According to Euroconsult's soon-to-be-released report "Satellite Communications and Broadcasting Markets Survey, Forecasts to 2018" the fixed satellite sector grew in terms of both transponder demand (+9%) and overall revenues (+10.7%) representing a peak in the current decade.

Digital entertainment and emerging digital markets remain the primary growth drivers, with corporate networks, military communications and broadband access uptake also contributing to growth.

"Digital TV broadcasting remains the primary growth engine for the satellite sector. Last year, 18 new satellite pay-TV platforms were launched for a total of 109 platforms now in service. Over 24,000 TV channels are now broadcast by satellite, with more than 2,900 TV channels added last year," said Pac�me Revillon, CEO at Euroconsult.

"Transponder demand also remained strong for communication services, particularly corporate networks, government communications and cellular backhaul."

"While a slowdown is expected as a consequence of the global economic downturn, growth should remain solid in 2009, potentially at approximately 7% and could still reach 5% in 2010, depending on the depth and length of the economic crisis," added Mr. Revillon.

"Compared to the telecom and pay-TV crisis of the early 2000s, core customers of satellite operators are relatively less impacted by the current crisis thus far."

Average fill rate for commercially available satellite capacity currently stands at close to 74% and may even reach even higher in 2009, following a four-year upward trend. This high fill rate is an important factor as it limits competitive pressure between market players, prevents a drop in capacity prices and protects revenue growth and profit margins.

However in the short term, some operators, particularly smaller operators, may find it difficult to raise the financing required for replacement or expansion of their satellite fleets. Export-import banks in the US and Europe have been increasingly proactive to partially relieving some of these issues.

While most known projects are still expected to obtain financing, delays in the procurement of certain satellite systems would not come as a surprise. This in turn could limit the addition of new capacity to the leasing market, which may cushion the impact of a possible slowdown in transponder demand.

Emerging Markets Increasingly Drive Market Growth
According to the Euroconsult report, which breaks the world down into twelve regions, growth in transponder demand remained particularly strong in emerging satellite markets, which include Latin America, Africa, Central Europe and large parts of Asia.

These regional markets represented 53% of capacity usage worldwide in 2008, and 71% of the net increase in capacity leased last year. Most of these are young, fast-growing digital television markets and still have heavy needs for telecom traffic carriage using satellites as a backbone for fixed and mobile traffic in areas not covered by terrestrial networks.

While the economic downturn could impact the development of satellite services in emerging markets, growth is expected to remain stronger here than in the most established markets such as North East Asia, North America and Western Europe. As the result, emerging regions' share of total capacity demand could reach around 58% by 2013, up from 53% last year.

In emerging satellite markets, competition between satellite operators and terrestrial solutions is expected to increase in the coming years. The future competitive environment and trends in capacity prices will largely be defined by the number of operators in service, local regulations limiting market access, procurement decisions for new satellites and the emergence of local leading operators in most regions.

Broadband Satellite Services Take Off
The consumer broadband-access-by-satellite market reached over 1.2 million subscribers (+30%) last year. Growth was primarily in the US, followed by Asia and was due to the availability of dedicated broadband service ("BBS") satellites.

In the US, two market players, WildBlue and Hughes, are locked in intense competition and driving market growth. In Asia, IPSTAR, traditionally based in Australia and Thailand, is pushing hard to penetrate new Asian countries.

The shape of the broadband satellite market is expect to change significantly in the next three years. New BBS payload projects in Ka-band have begun to flourish, and new systems with much larger capacity are expected to be operational in North America, Europe, the Middle East and North Africa by 2011.

Beyond consumer access, those systems are expected to be increasingly used to serve the enterprise as well as potentially other market segments.

Prospects are strong for the broadband satellite market with up to 10.5 million subscribers worldwide by 2018. However, a number of challenges will need to be addressed. Beyond technical aspects and regulation, the ability to build strong distribution networks in fragmented markets such as Europe will be key to guaranteeing the success of satellite solutions.

Prospects To 2018
Euroconsult expects the global market value of capacity used for the traditional FSS market to reach around $13.4 billion in 2018, or $16.8 billion including wholesale revenues from emerging BBS systems dedicated to satellite consumer broadband access.

Industry consolidation, which will continue, will be offset by the emergence of new regional satellite systems backed by either private or public investors.

According to Euroconsult, growth is expected in all regions of the world in the next decade with a much stronger showing in emerging markets as the most established markets tend towards maturity for the leasing of classical satellite capacity.

In markets such as North America and Europe, capacity usage on BBS satellites could represent a new growth driver for operators though significant uncertainties persist regarding the potential size of this market.

Average revenue growth for "regular" capacity leasing of approximately 5% is still expected in the next five years, largely in line with our previous forecasts as a slowdown in the economic cycle of the satellite sector was already anticipated due to the end of analog broadcasting in certain markets, the adoption of improved compression techniques for satellite transmission, and a potential new consolidation phase in the burgeoning digital TV market.

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